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Universal Credit can be claimed by anyone based in the UK who is on a low income and is between 18 and state pension age. Additionally, applicants cannot have more than £16,000 in savings, which can be split among partners.
Because of these rules, many Universal Credit claimants will have limited financial resources but they may be able to utilise the “help to save” scheme.
A Help to Save account is a type of savings account that can be opened by Universal Credit claimants.
This account will allow savers to get a 50p bonus for every £1 saved over four years.
The scheme is backed by the government and as such, all savings held in these accounts are secure and safe.
Savers utilising these accounts will be able to save between £1 and £50 each calendar month.
The bonuses will be paid at the end of the second and fourth years of holding the accounts.
These accounts can only be opened for four years and will automatically close after this time frame.
They can be closed at any time before the four year time frame but the holder will then miss parts of their bonuses.
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How the bonuses are paid out can be quite complicated.
After the first two years of holding the account, the first bonus will be paid out and it will be 50 percent of the highest balance the person has saved.
After four years, the final bonus will be paid, with the amount being 50 percent of the difference between the following two amounts:
- the highest balance saved in the first two years (years one and two)
- the highest balance saved in the last two years (years three and four)
Because of these calculations the bonuses paid out could vary from person to person.
However, the most that can be earned in bonuses from the Help to Save scheme is £1,200.
The bonus itself will be paid into a bank account and not the Help to Save account.
The Help to Buy scheme can be used by Universal Credit claimants so long as their household income reaches at least £604.56 or more from paid work a month.
Additionally, the account can be opened by people:
- receiving Working Tax Credit or are
- entitled to Working Tax Credit and receiving Child Tax Credit
It should be noted that receiving a bonus from a Help to Save account could affect a claimant’s ability to receive other benefits such as Working Tax Credit or Housing Benefit.
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